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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.




San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)






Us 13, Europe 11, China 10, California 10, U.s. 10, Hauwei 5, Greece 5, Geico 4, Schwab 4, America 4, Latin America 3, Ohio 3, Michele 3, Columbus 3, Hank 3, Scott 3, Citi 3, Alocoa 3, Alcoa 2, United States 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    October 8, 2012
    4:00 - 5:00pm EDT  

financials, tech stocks, everybody else h d d d day in the sun. >> all right, well, there is the bell, ending the first hour of the "closing bell." stock market's going down with 23-point loss on this columbus day. we'll have much more ahead. in fact, somebody's speaking out on behalf next. welcome to "closing bell." >> here's what we're following at the close. if it's monday, odds are the dow is in the red. that's the case once again. the blue chip index closing lower for 17 out of the past 19 mondays. investors getting cautious ahead of what is expect expected to be a weak earning season. apple shares getting hammered, falling to a six-week low after another problem with the iphone 5. this time it's over a purple haze. no, it's not a joke.
it appears on some photos. stock falling below the 50-day moving average for just the second time since late july. >> cue jimi hendrix, please. dow industrials down by 26 points. nasdaq getting hit a bit harder, down 0.75%. you can blame apple for that. it's been down since iphone 5 came out. >> people get nervous. jitters over global growth and what many are expecting to be the worst earning season since 2009 have kept investors on the sideline. with alocoa setting the earning season tomorrow after the bell, how should investors position their portfolio? >> let's get with scott wren, hank smith and fusion analytics josh brown. josh, i'll throw it to you first. good to see you again. so, everything's on the line here with earnings, right?
>> i don't know if everything's on the line, but to a large extent, whether or not this rally continues into year end is going to be pred predicated on not only the earnings they report this quarter but what they say about q4 because estimates have not come down to the degree this quarter's estimate have. the go forward guidance for management will be key here. >> hank, do you think people are expecting too much out of corporations this earning season? >> oh, no. i think actually the expectations will probably be exceeded, even though i think we'll have negative earnings growth. the fact is, you've had enough preannouncements by industrial heavyweights like caterpillar, federal express, u.p.s., norfolk southern that the expectation is already for negatilecative earn. if we can beat expectations, that will be good for the market. >> scott, how do you see it here? everything's on the line, is that how you see it? are we making too much of that? >> scott, one thing have you to
remember. laggings -- earnings are a lagging indicator and the market is expecting lousy earnings comparison. a little negative, a little positive. fourth quarter earnings are probably too high. consensus earnings estimate for the full year, mainly because of the fourth quarter, are too high. really the market has very low expectations coming in here. these ceos will not be pounding the table saying, hey, we're going to do great. with an election, the fiscal cliff, uncertainty over chinese groeshgts what's going to happen in the middle east. no way these ceos are going to step out on the ledge and give us rosy outlooks. >> you talked about guidance, josh, and how important it's going to be. how much do you expect american corporations to talk about the fiscal cliff and what it's doing to them? >> i don't think it's showing up in the results they're talking about this quarter -- >> but will they give guidance
going forward -- >> right now earnings are running 4-1 over positive preannouncements. if you look at what they're blaming, actually, thompson reuters say 50% of the companies have blamed europe, the companies negatively. 8% warned based on strength from the dollar. another 6% blame china. you're not hearing a lot about fiscal cliff uncertainty, at least not yet. i think the right question to be asking ourselves is, whether or not those trends, the things that management are blaming, are bound to continue into another quarter. none of them strike me as one off. all of them strike me as the types of things that could persist. that's why i talk about being concerned more about q4 than q3. >> hank, are we too negative? is it possible sentiment has gotten so bad that the table is set for an earnings beat, upside surprise, as they say down here? >> i think it is. it's amazing, here we are, 3 1/2 years off the trough of the
economy, 3 1/2 years off the bottom of the market, up 115 some odd percent, and yet sentiment still remains extraordinarily negative, with people putting money into bond funds and taking the most overvalued asset class and taking money out of equity funds. so, the sentiment is more reflective of a market bottom, not a market top. >> hank, at the same time it looks -- >> guys, i don't think sentiment is quite as negative as the gentleman is stating. let's not focus on what they say. let's focus on what they do. last month we saw huge inflows into u.s. stock etfs. $18 billion versus $3 billion in august. in addition to which this entire rally since the end of june has been predicated on multiple expansion. that's positive sentiment. none of this has anything to do with economic growth. because the fact. matter is, it's just not there. profit growth isn't there, either. we're going to be down 2.6%. i think sentiment, actually, is way stronger than what the
earnings would suggest it should be. >> scott, give us some takeaways of what people should do here as they look forward earning season. >> well, michele, i think, you know, we're in the second leg of this cyclical bull market. they need to be looking for opportunities to buy consumer discretionary stocks, technology stocks, even material stocks, which have gotten pounded here. i'm looking for continued expansion here in the states. continued expansion globally. people need to be positioned for that. we're going to see economic growth in the u.s., i think at least through 2014. i think the market is going to grind higher over the course of time. i think we'll see more volatility. but from point a to point b, point b being the end of 2013, i think the market's going to be higher than where it is right now by probably mid, single digits. you add dividends in there and you have a pretty good chance for return. >> it's good to see all of you. talk to you soon. >> thanks, guys. is there any end in sight to these monday blues? bob pisani, do you have any answers? >> well, look, we've -- right
near 4 1/2 year highs. so today you have to write off here. narrow trading range stock, 3-2 decline advancing stocks. one of the lightest volume days of the year. major indices, modest declines. we were in the 40-point range all day on the dow. transports outperforming industrials. weak sector here was the tech stocks. take a look at other major weak sectors. housing was weak today. no big news there. semiconductors were the weak link in technology today. emerging market it, the eem was weak today. tech group component markets, jabil, weak all day. apple three days in a row to the weak side. four-year highs for lily with promising results from an alzheimer's drug. >> 25 stocks on the s&p hit
all-time highs on friday and several came from the insurance industry. mary thompson has details. >> it's property and casualty insherers hit those multiyear highs. chief among reasons, property and casualty firms are pushing through modest rate increases. month major or big weather-related payouts this year and many companies are buying back their own stock to mitigate the drag of low interest rates, how that has impacted the company's investment income. analysts noting the plain vanilla business models, and a lack of exposure to europe make them a more safer, more predictable investment for what remains an uncertain time. ace, as investors await the impafkt the drought. all state closed although multiyear highs. travelers, and chubb bought back
305 million of its own shares. allstate high even despite second quarter drop in key auto policy business. it gets to push on rate increases and analysts like that news. >> thanks so much. keep it right here. >> a lot more ahead on this big, big monday edition of the "closing bell." >> announcer: coming up, bipartisan support? what could possibly have both sides of the political aisle actually agreeing on something? find out straight ahead. plus, defying gravity. markets up double digits this year. but earnings are slowing down. remember what happened last time when earnings allegedly didn't matter? why someone here is worried. and pumping up profits. the crude reality behind why gas is up while oil prices continue to slide. that and a lot more is ahead on the "closing bell." [ male announcer ] how do you trade?
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here's something truly ameying. we have found bipartisan agreement in congress on a key issue of national importance that members from both sides of
the aisle say china cannot be trusted. >> two china telecom firms should be blocked from further expansion into u.s. territory. here's one of the authors of the report, mike rogers, cautioning corporate america. >> our advice to the private sector is this -- your obligation is to consider larger data protection and national security implications of your business decisions, and we would not advise doing business with these two companies. >> joining us now in a "first on cnbc interview" vice president of external affairs, will yaum plummer, and david faber, who has covered this issue extensively on cnbc. the u.s. congress basically saying your company cannot be trusted. your initial response? >> well, we certainly heard a bipartisan message there are some issues in item of -- in
terms of trust for states. we, unfortunately, heard that there's going to be an approach to some of those issues of lack of trust between states. singling out an independent employee-owned company. but it's a company doing business in 150 markets with over 500 telecom operator customers. $32.4 billion in revenues last year. and our product is globally trusted and the security and integrity of that product is globally proven. >> can i ask you something basic? >> please. >> the company admits there's a chinese communist party within the company. that there's a committee there. employees of the communist party at the company. why and what do they do? >> it's a fine question. you made reference to them being employees of the communist party. in fact, that's not the case. enterprise law in china requires a kfc china or walmart china or
cisco china or hauwei to allow for the existence of a communist party committee within the organization. hauwei, like these other companies, allows for that existence. the communist party committee doesn't have any interaction with or influence on our business operations. >> but it's alleged by our investigators that the company did not cooperate at all with the investigation. is that true? and if so, why not? if there's nothing to hide, if the company did nothing wrong, why not cooperate? >> oh, that's a great point. the company cooperated immensely. we hosted the staff in washington in december and then in china in february and members and staff in hong kong in may, with our ceo. we responded to multiple ent interrogatories, delivered reams and reams of paper.
while we were with transparency and good faith, we got a book-long press release that launched the investigation last november. >> they go into quite a lot of detail in the report itself, and a lot of it, hauwei, they say, refusing to provide information that was requested. taking a look at a random page. the committee requested they list ten largest shareholders. hauwei refused to answer. much of the report itself goes back to this idea and the relationship between hauwaei, its founder and what the real role is of the chinese government in terms of potential control of this company. >> no, those are also fair points. there is no role of the chinese government in the company. the committee knows full and very well that when they visited our facilities, that they actually had access to the entire list of all 65,000 of our employee shareholders. look, this industry -- the committee is focused on cyber
security concerns. those are very legitimate concerns. but, the fact of the matter is, it's a global industry. hauwei, cisco, eriksson, nokia se seimens operating on a common stage with overlapping -- there are cyber concerns but they are universal. anything short of universal solutions is nothing but political gamesmanship. >> i've done a lot of reporting on it. it goes back to the chinese, broadly speaking, to spy, usually using the internet on u.s. corporations and to steal their secrets wherever they may be and whatever way the chinese can. many say about hauwei, in fact, it came from virtually nothing as a result of today because of stolen intellectual property. how do you respond to that? certainly, you must understand that in the context of that belief, hauwei would certainly be one key question mark.
>> well, you made a number of comments about the chinese. of course, hauwei is not china. hauwei is hauwei, we're doing 70% of our business outside of china. the company is 100% employee owned. we have $4.6 billion capital on hand from our employees. we finance ourselves the way any other major multinational does, through commercial banking relationships as kpmg audits in our annual report and has done for a decade. the facts are the facts. and if the national operators across europe, across asia, in canada, throughout latin america and africa, have deployed our gear without incident and without concern -- >> sir, with all due respect, we have far more advanced defense systems here in the united
states than anywhere else in the world. we have a lot more intellectual property to protect on that front. >> intellectual property is something hauwei values greatly. we are the world leader in terms -- >> that's not the spirit of my question. you say they operate throughout europe. they operate throughout asia. those countries -- europe does very little in the way of its own defense, et cetera. we are the primary drivers of defense spending in the entire world. we have a lot more to protect. so, to say they're doing business in europe doesn't answer the concerns of the united states. >> i'm not sure what the connection is there. hauwei sells commercial telecommunications infrastructure. this is the plumbing through which internet traffic takes place. we don't operate any networks. the gear they deploy is built to the same global standards as our competitors and all of it is being developeded and coded and built in china to a great extent.
there are vulnerabilities, but they are universal. and anyone that would purport to suggest that you can resolve those by singling out a single company is actually creating a more dangerous cyber situation by lending to a false sense of security. >> all right, sir, thank you very much for appearing first on cnbc. >> thank you very much. >> coming up, will our children hate us because of our debt and deficit? the architect of greece's debt deal is here with a warning letter later on the "closing bell." also coming up, nightmare in california. why the golden state is the only one in the country to see higher pump prices over the past couple of weeks and what that could mean for the rest of us. up next, mixed signals. major averages may be near multihighs but we'll make sense out of the good and ugly. i'm an expert on softball. and tea parties.
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earning season gets under way tomorrow. alocoa reporting results after the market closes. its ceo will be here tomorrow, as he always is, exclusively with reaction to those numbers. heavyweight financials kicking off at the end of the week. there's wells, jpmorgan on friday and a lot of important companies in between. >> if you look at your screen, you can see the calendar. it is packed. latest thompson reuters data says earnings are expected to
fall 2.3%. that would be the first year over year earnings decline since 2009. here to help us break down these numbers, jeff klein of lpl financial and jeff cox. jeff, let me start with you. you expect corporate profits to be negative, revenues to be soft. what happens to the stock market if you're right? >> stocks don't seem to be braced for disappointment in earnings. they've been driven by macro economics and not the microeconomics of corporate earnings result. since the first quarter of 2009 when profit growth turned up, earnings are up 83%. stocks are up 83% since then. this one-to-one relationship is no mistake. i'm afraid as we go through the earning season we might see weakness in stocks. >> the bar couldn't be any lower, that's for sure. how much of that, do you think, is the street, analysts just trying to set it so low the companies can fairly easily get
over the bar? >> this is the game we always play with earning season. with things looking as bad as they are now, i think this game becomes more critical. look, it's so far so bad, we actually -- though alocoa kicks off the season officially tomorrow, we've had about 26 companies report so far. only 50% beating, not very good in terms of historical terms. as far as the dow goes, dow 30 companies, looking for about a 0.7% drop in revenue, which is very key. so, i think you're just going to kind of continue to see them ratchet down the numbers. i was interested to see what jeff kleintop had to say about the market being driven by macro economic factors. i'm not sure which ones those would be. making people buy stocks. i think it's just been a function of central bank activity. i think that we've seen the market becoming somewhat -- >> mr. kleintop, do you want to respond? >> yes. it's the fed, the prospects for some resolution around spain, in europe, maybe the people's bank
of china, some expectation they'll find stimulus here soon. the possibility of some negotiations here in the lame duck session. all these macro issues have been distracting from the micro. i think this is going to be a soft earning season but it's the future we need to worry about. and it's the downward guidance to q4, expected to be 10% year over year. where is that coming from with a gdp around 2%. >> i posted a story a couple weeks ago with headline "earnings magic" and refers to what jeff talked about with fourth quarter earnings. i think they're almost 10% improvement expected from the third quarter, which i don't -- i have no idea how you go from being negative 2.4 to positive 10%. some folks who think will will be multiple expansion and hitting the trough, the note s&p put out before, sam stovall was on earlier in the show. i don't get it. i don't see where it's going to come from. i think this market has just been looking for a reason to sell off.
i think somewhere along the way, earning season will provide a pretty good excuse. >> although -- >> michele -- >> yeah, go ahead. >> i was going to say, if you do get that pullback in this earning season, and you may after the first week or two of results. we hear from the material sec for right up front. companies like alocoa. those numbers are expected to be down 20% year over year for material sector. you could get good news late in the earning season. consumer discretionary companies, retailers report later in the season. they could have good results. that might mean it could be good to buy on the disappointment of the first two weeks as we get rebound on stronger results, 7% gains, we're likely to see in consumer discretionary. >> i think the buy signal could come with que quech-- qe4, 5, 6. i would see the fed accelerating qe -- we'll start doing roman numerals. >> that's an expansion of the mandate, employment, now earnings gain?
>> you couldn't resist to comment on that. >> jeff cox, i mean, look, expectations, as we said at the outset, couldn't be any lower yet we're barely off this 4 1/2 year high. if the expectations were in the market that earnings were going to be terrible, wouldn't we have already seen some sort of significant pullback ahead of that? what confirmation do we need at this point? >> i think you'd have to see some visible signs first before, you know, it's going to be interesting to see what alocoa comes out with tomorrow because they registered a goose egg last quarter. if they come out with something negative, banks will -- kayla toush and jeff bergman had a great post online with what's happening in terms of the banks, the loan loss provisions they've been using to dress up their balance sheets. some analysts afraid of that. if bank earnings come out and show weakness, visible signs of weakness, i think all -- you know, all of the gains since june was just pricing in qe3. >> if i recall, i mean, alocoa,
at the outset of last earning season was a surprise to the upside. it wasn't nearly as bad as some people feared. that seemed to set the tone for what was a good earning season, at least from an earnings perspective. perhaps not on the revenue side. >> that to me is what i was looking for. i think that's what a lot of people on the street were looking for, is to see what the revenue looked like. now also i think when you compound it with 1.3% gdp growth, and you look forward there, you know, the ratcheting down of global growth expectations were basically in a global recession now. that it's going to be a very hard case to make going forward for this state of corporate america and what the next impetus for another leg higher in the market is. >> thank you, the two jeffs. >> you bet. productivity is so slow, you're not going to get it on the bottom line either. keep that in mind. thanks. >> guys, thank you. tune in tomorrow when, as we said, we'll speak to alocoa
chairman klaus cle schls kleinf. >> what is this '70s? gas lines are back in california as prices hit record highs. we'll go live to jane wells, a report on why this is happening and what's being done to stop the surging price spike. later, another reason your children will hate you. one of the architects of greece's debt restructuring plan says that will be one of the many grim consequences of america's huge spending problem. he's here with that happy news. >> oh, boy. and using sin for salvation. ohio is betting big on a plan to raise money for state couffers. live to columbus, ohio, it is columbus day. >> we'll hit the tables. folks who save hundreds of dollars switching to geico sure are happy. i'd say happier than a slinky on an escalator.
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finally getting some relief at the pump. los angeles wholesale gasoline falling 60 cents on governor brown's winter blend gasoline waiver. jane wells is in northridge, california. she'll explain what all that mean. a certain mandated blend accounted for 60 cents for the price of gas in california?
>> reporter: well, how about that, michele? they are saying that california's case of bad gas may be coming to an end. while wholesale prices are supposed to come down, or have, retail prices haven't. i checked several retail stations i monitored on friday, the price of gas is exactly the same as on friday. aaa says the average price in los angeles of regular is $4.70, a record. this should start to change since the governor ordered a cheaper blend of gas to be sold here three weeks ahead of normal. >> this is a great step. it will allow refiners to produce 10% more gasoline, like adding another refinery to the market, so it will make a big difference. >> reporter: oil refiners are saying, get ready for new trouble ahead as a law forcing new clean air standards on california industry called ab-32 takes expect.
a boston consulting group study predicted five to seven california refineries could shut down as a result of ab-32 related costs. caught in the middle, drivers. >> can't do anything about it so we have to deal with it. it's unfortunate but that's just how things are at the moment. it just sucks. in so many words. >> reporter: well, the president is in california today. we don't know if he has said anything yet about the gas price situation. so far none has been reported. of course, more gasoline coming into california could have the unintended consequence of raising gas prices in nearby states in the short term. senator dianne feinstein things the whole thing is fishy. she's asking the ftc to investigate saying state data shows production last week and stockpiles were close to what they were a year ago when prices were nearly a buck cheaper. back to you. >> i'm sure congress will get to the bottom of it, she said cynically. thank you, jane --
>> you? please. >> while california has its own set of problems, what about the rest of the country? gasoline prices haven't budged but oil prices are down 3%. why did nat gas prices go down like a rocket, up like a phetter? >> sterling burnett says there are legitimate reasons for this. dan wise from the center for american progress is calling shenanigans on the oil companies. he joins us now on the phone. gentlemen, good to have you. sterling, i'll start with you. i don't know. every day on this network we talk about how oil prices have been coming down and yet we're still talking about how gas prices are going up. what's the deal? >> well, there's a number of reasons that there's a disconnect short term between gas prices and oil prices. i can't speak nationwide. i drive down the street last week, intexas, where i
buy my gasoline. prices varied 15 cents between gas stations and rose and fell over 15 cents in one week. the gas stations, they buy their gas at different times. if they're anticipating buying gas tomorrow at higher prices, it goes up $3, they keep their prices up. if they buy it cheaper,thy prices go down. market supply works in garland, but gas prices don't always fall as much as oil prices do simply because oil is only part of the price of gasoline. you only get half of the gasoline out of a barrel of oil, and, so -- >> let's get dan in here. dan, your thoughts on this issue? >> well, there's two pieces of it up. were correct at the beginning when you talked about rockets and feathers. oil and gasoline prices tend to go up like a rocket, but when oil prices come down, they
come -- gasoline prices come down like a feather. not nearly as quickly. our oil prices now are significantly -- >> why is that, dan? why the disconnect? that's the whole points of this discussion. >> well, here's the issue. nobody seems to know. the federal trade commission did an analysis of this last year where they identified the rockets and feather phenomenon but there's a number of potential causes. it may be that consumers are much more price-sensitive as the price is going up than when the price is coming down. they don't always look for the best bargain as long as it seems like it's a little lower. in addition, as sterling points out, that oil prices is only 70% of the price of a gallon of gas. there are other things, marketing, taxes, things like that. we don't know the cause but we know one thing, the oil companies fully integrated make more money when the price of gasoline is higher.
so, it's certainly more than coincidental that the price of gasoline stays higher longer than the price of oil. there's no evidence to show that there's something -- that there's a legitimate effort by oil companies to keep gasoline prices higher. it is certainly suspicious and certainly profitable for the oil companies. >> sterling, what's going to get gas prices down? that's all people care about. they keep hearing oil prices are going down, yet they drive to the pump and pay $4.50 or $5 a gallon? >> well, you can work three end of it. you can work it, supply. you can work on demand. and we're doing both of those. and you can work it volatility, which is a huge, huge factor. as i said, gas -- most of the retailers in my area are independent retailers. they don't lock in long-term or can't lock in long-term
oil/gasoline contracts. >> but how much -- >> they go with the stock market -- >> how much comes down to individual service station owners trying to gouge consumers? isn't that what it might come down to? people are suspicious of that. >> i think they're suspicious of that, but when you can buy gasoline at two locations, one seven cents higher a gallon than the one across the street, you know, it seems to me, if you don't like the higher prices, you go to the cheaper gas station across the street. that's what i do. >> one thing that's important -- >> guys, we have to go. thank you. >> i'll say this -- >> guys, we have to go. so sorry. it's been a great discussion. >> thank you so much. >> he has mopped up debt crisis in greece, mexico and russia. on what needs to be done to clean up the debt mess right here in the u.s. he says it may be the difference between your children hating you or not one day. >> that's a cheery thought. later s your state next to
sin? we'll go live to ohio for a look at its dicey solution to fill the big gap in state coffers. ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd.
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trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. welcome back. attorney called the philosopher king of debt. he's the man greece hired to restructure its debt back in march. he's done russia, iraq, he's been on the front lines have lines of negotiations for financially challenged nations for close to 40 years. what does he think about the fiscal problems here in the united states? he says we want our kids to not
hated us, we better do something about it now. good to have you here. >> thank you. >> are we overstating it? are we in the united states spending so much that we can be problematic, like europe? >> we have one great advantage over europe. we borrow only in our own currency. so, an unsustainable debt burden for this country has an escape valve that europe never had, which is inflation. but the answer to your question is, will future generations be cursing us for our profligacy. i am sure they will. >> why? >> because they'll have to pay higher taxes, lower standard of living or endure the inflation that must be used to render that debt stock sustainable. >> they say u.s. could
eventually grow its wait way out of this debt problem. >> that's always the argument. the argument is a debt problem has a numerator and denominator. the numerator is the size of the debt, the denominator is the size of the gdp that supports it. the projection is about ever higher gdp. that's, of course, never really happens. but we live in a world. aberationally low interest rates. what happens if you have a $16 trillion debt stock growing by a trillion a year and interest rates start to move up, which they surely will at some point. >> whether we see fighting on the streets of latin america, when we see horrendous riots in greece, are you suggesting that could be us one day? >> no, no. i don't see that. >> why not? >> simply because we do have an escape involve. >> we can inflate our way, is what you're saying? >> and it is -- >> wait. there are riotings historically
in latin america, china, all kinds of places about inflation. >> well, but that inflation is not being driven by a desire to reduce a debt stop. no, i don't think we'll see that. the path, i think, unless we bring it under control, is that at some point the markets begin to say, no more. and they say that either by raising the interest rate on what they're prepared to lend to us or in the extreme case, simply saying, you're overindebted and we're going to pull back. >> when is that going to happen here in the u.s.? because there are so many predictions that at some point the bond market will say to the u.s. government, no more, we're not lending to you anymore. >> at some point i think it will. right now because of what's happening in europe, there's a flight to quality, and we are the principle beneficiaries of that right now. we're able to borrow at historically low interest rates. >> you've been a big advocate of
banks taking very big haircuts in the past. they should suffer. why? >> i'm an advocate when it has to happen. if pain has to be doled out, the people who lent the money, took the credit risk, earned the reward they felt was c commensurate with that credit risk, yes. having to step up to the consequences of that. yes, i do think that's right. >> bankers always say, but if you don't pay us back, your country will never be able to borrow again. >> but that's surely, surely we're beyond that. >> you're saying that's not true? they pony up every time and the suckers give them money all over again. >> no, no. the memories of the markets these day are very short. look at countries like mexico or russia, it went through terrible debt crises and became investment grade.
the idea there's an indelible stigma to someone that defaults at some point in their career, i think that's just a fallacy. >> thank you for joining us here on cnbc. a pleasure. >> thank you, michele. "fast money" starts in a minute. melissa lee is at the nasdaq with a preview. >> top of the hour, as you know, america's favorite stock looks like it's breaking down. we're talking about apple. we have a technical analyst who says apple may not be best tech stock right now to be putting your money to work in. also, the manager of one of the biggest pension funds out there, the university of texas' ceo and cio will tell us where he's putting money right now and could coal be the comeback sector of this year? we'll talk coal, the opportunities there. that and much more at the top of the hour "fast money". setting the stage for moment morning, a trio of wall street's best market watchers will tell you what will move your money first thing tuesday. >> plus, ohio, baby, it's not exactly vegas but the buckeye state is placing big bets on the
gaming industry to fill its coffers. our brian shactman up next on whether it's actually paying off. [ mujahid ] there was a little bit of trepidation, not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪
. cash strapped states are turning to sin for their financial salvation. brian shactman is in ohio where the state is making a big bet on, what else, casinos. brian? >> well, michelle, listen, by now, story has been well told between real estate failures and everything else we have had in the economy, what are you gonna do? well, you turn to casinos because they need the money. you take this here in ohio here. we have had a change in the economy and it's not just because of the improvements that we have seen in jobs everywhere else. casinos opened up all across the country and given jobs and raked in tax revenue. the hollywood casino in columbus, ohio, the third opened in the last year. each paid a $50 million fee just for the privilege and 33% of the all the money spent here goes back to the city state and counties. the other two casinos in ohio opened up last year generated 40 million in august you do the
math, a lot of money getting spread around and then there is the job picture, 3500 to build it. 56,000 people, that's right, 56,000 people applied for 2,000 casino jobs, makes it an even better tax story. >> the more jobs you have in a community, the more income there is to the city so the city can pay for police and fire, fill the potholes, provide other economic development opportunities, health care, housing, all those things that cities perform. >> this is being painted as a panacea and it's not. the market share gains here probably to the expense of other forms of entertainment or casino. also, the two other casinos opened up in ohio last year reported month over month revenue decreases and obviously, the most important thing is a lot of people gambling and losing here probably should be saving and paying down debt. but the bottom line in the near term it is creating jobs and juicing up the tax covers. back to you. >> so brian, i mean, there's no
guarantee that the big crowds we see behind you and what seems to be an opening day euphoria of some sort is really going to have any lasting impact based on the economic numbers you brought from the other ohio casinos? >> i think the key is that you just don't know. their argument back to me, pan national, which has one of those other two, says, you know what, a lot of that is seasonal, maybe the initial pop has worn off and going took more normalized levels but i do think it is a great point because the initial projections for tax revenue when they first pitched the casinos, think it will come in well below that i think you need to check back in here in two to three years and see what this crowd looks like on a monday afternoon. >> the basics of increased supply, right? a time when casinos brought in a ton of money because there were hardly any in the country. but once you don't have to travel so far, you can just drive, really, it becomes a very even playing field, right?
>> when i wasly, it was, what, new jersey and nevada and now it's 23 states. so obviously, it's changed. supply and demand, we haven't gotten to that point yet. we know atlantic city is getting skewed by pennsylvania. what happens when they open the fourth casino in the spring of 2013? will they start to lose business sneer these are open-ended questions but there will be a tipping point on supply/demand. >> brian, hopefully this is your last live shot, i see an empty seat at that blackjack table over your right shoulder. >> i'm in. thanks, buddy. >> brian shactman for us. what will move your money even before tomorrow's opening bell rings? >> our trio of wall street's top market watchers gives you a leg up on the other side of the break. mike rowe here at a ford dealer with a little q&a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate.
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>> steven, you got 30 seconds. >> thank you. we will most likely expect low volatility you continue low volume in the u.s. stock market but we are expecting with earnings season beginning tomorrow, excluding alcoa, could accept lower earnings expectations, which is the worst postrecovery we have seen in a recession in a long time. we need to recommend cautious optimism. >> all right. chad, over to you. >> two things for tomorrow, alcoa, reporting after the close, expect about a 13% decline in revenues as well as the nfib small business survey is going to come out. that is going to be a little bit bettha